The Grown-Up's Guide to Running Away from Home, Second Edition: Making a New Life Abroad (8 page)

Create a runaway budget based on your interests, age, and financial condition. Cutting costs when you live abroad may be easier than you think, because some expenses at home may have been predicated on “keeping up with the Joneses” rather than on necessity and personal desires. Expats tend to be accepting types who are more interested in the adventure and meeting interesting people than in driving the latest new car. When we started to rationalize our dented used Citroën in front of one long-time New Zealand expat, he smiled whimsically: “That’s an American thing. You don’t have to explain, because we’re all doing the same thing and couldn’t care less.”

That said, let’s look at two categories of expenses you’ll incur when you run away from home: (1) start-up costs of getting overseas and getting situated and (2) daily living expenses.

When you run away, you’ll incur initial expenses that are necessary to make the transition. You may be able to live, for example, in Mexico on US$1,000 a month. But you’ll need the money to get there, stay in a hotel while searching for an apartment, rent a car until you’re settled, and move your belongings or furnish your lodgings.

As these are nonrecurring costs, you won’t have to budget for them monthly. However, you will have to have a lump sum set aside to cover them immediately.

I debated whether or not to include budget numbers in this book, since they can change drastically based on inflation and exchange rates.

However, two questions everyone asks when they first dream of living overseas are “Can I afford it?” and “What does it actually cost?” Unless you’re nosy like me, no one ever tells you, because the topic of money, like sex, tends to be off-limits. But everyone wants a starting point, with figures to mull over, so here are a range of budget compilations, based on typical situations. Keep in mind that these prices are quick snapshots that reflect basic costs in a range of areas. I’ve converted the amounts into U.S. dollars using exchange rates current as of this writing, but be warned that they can change depending on exchange rate fluctuations.

Therefore, use these figures as a base, not a bible, to enable you to note the possibilities. Remember, also, that different areas of a country will also vary. The top resorts and major cities will be more costly than a small out-of-the-way village. And you have a choice within the basic parameters of an area’s cost of living and can choose to be economical or extravagant.

In Portugal’s popular Algarve beach area, for example, I ran across people with extremely diverse lifestyles, ranging from a woman creating a hilltop oasis of simple cottages with her own carpentry skills to a couple working part-time to make ends meet to a couple enjoying a pool and maid thanks to a healthy retirement package and inheritance. Unlike now, the dollar was strong then, and their budgets ranged from $14,000 to well over $75,000 a year. Obviously, they’d all give different answers to the question of how much it takes to live in their area of Portugal.

At the time you plan an adventure, investigate current costs at your specific location and see how you can make your own finances fit in the location you choose.

Let’s start with a low-end budget in one of the most economical locations, Mexico, then move to a few other possibilities. These budgets reflect the low-to-moderate end of the scale for the countries involved. If you’ve got bunches more money, lucky you.

This typical couple have reached retirement age but are trying to live mainly on Social Security—something almost impossible in the United States. They didn’t want to settle for a boring life in a shoebox apartment in the States. Now they rent a large two-bedroom apartment in colonial Mexico complete with maid. They socialize with the numerous other expats in the area at cocktail parties and art gallery openings and volunteer at the local English-language library. They use the Mexican bus system, occasionally visiting beach areas or other towns to compare pottery and visit tourist sites.

This couple live in a small town in the French countryside, away from the high-cost areas of Paris or the Côte d’Azur. Their small three-bedroom home was purchased with a mortgage. The couple’s budget includes several costly extras: health insurance for their U.S.-based private coverage, as well as higher-than-normal postage, telephone, and online fees for the Internet, which they use to maintain contact with their children and friends. This couple occasionally sell art work and writing to supplement their income, though they have the consolation of coffee breaks that include French croissants.

I met one couple in this area who were fortunate enough to have received an early buyout package from his previous employer, which paid a healthy pension, plus she had inherited a princely sum. They live quite luxuriously and travel frequently. The following budget would not be theirs. I met others who were happy and comfortable on much less. This budget is a compilation of those of people I met who were working part-time but still enjoying the beaches and lifestyle.

Once you know your destination and have done your homework on costs there, you’ll be able to create your own budget. Be flexible. As you proceed, adjust the figures for better, worse, or breaking even. In our case, for example, we spent less on a used car than we’d planned, but we spent much more on the gas to fill it up.